BTC WEEKLY REPORT- 19th March,2022
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Price is still trading below our key resistance level at 41950 and in danger of setting a lower high. The recent bullish momentum will count for nothing if price fails to close and hold above this level.
Should the price flip $41,950 level then we target the next key resistance level at 48753 and bulls will be hoping that the supply zone above $53,000- which has rejected the last four advances – is ready to be invalidated.
These two levels (41950 & 48743) will form our new range should we break through and hold and market will start looking very good for longs.
1Day time-frame outlook:
I’m still watching these levels for Bitcoin. We manage to finally get above 40K again and it did not turn out to be a fakeout ike last time.
In the above chart, I have clearly marked out 4 levels to understand Bitcoin price action in the simplest way.
- The RED line is the ATH resistance level where Bitcoin created a double top and is now major resistance as price has retraced very deep after getting rejected twice from that level.
- The BLUE line is the first support after the ATH price level, as on two occasion a rejection from the highs saw some kind of support being built there, followed by a relief rally, but ultimately a deeper correction and a bearish retest have now made $53,226 a strong resistance
- The YELLOW line at $46,900 is simple an area that needs to be flipped with volume and then made into support for Bitcoin to have a regain of bullish momentum mid-term and go towards Range high and then ultimately look for a new ATH
- The PURPLE line at $42k is now the immediate resistance for Bitcoin and this level has to be cleared. We have seen 5 unsuccessful attempts to break this region and a bearish price action has followed
Overall, we are currently seeing price retrace lower towards the breakout area at around 40K, this is where we want to see a bounce for that potential move up to Range Highs with a particular focus on the Monthly Open level at around 43.4 as TP in case we get that move.
If we fail to hold this level as support I would view that as very bearish sign and anticipate a move down to $35,500–$34,000 is likely, but if we can hold this 40K region as support today i think we might see some very strong moves from Altcoins next.
More details on the next 4H chart on exactly what I’m looking for.
4H Time-Frame outlook:
Here we see our range with the thicker Yellow line representing the range high and the purple line the range low. We have been trading in this central area since March 4th with prices failing to make a decisive move in either direction. We have been in the overall range since January the 22nd.
With the RSI looking bearish and also moving towards the downside, this could be a sign of weakness. Combine that with the fact price couldn’t reach resistance and this could be the early signs of a steeper correction.
However, price is still in a bullish trend so until we break market structure we remain cautious. Technically, even if price drops all the way back to the $38,898 level, as long as this holds as support then it wouldn’t set a lower low and we could remain in a bullish market structure.
Positive outlook:
This actually does look pretty good for a 4H rounded retest here. I would love to see BTC bounce on the $40,000 level and confirm it as support, followed by a breakout with a 4H bullish engulfing candle and high volume to confirm it.
If this happens it does make sense for a move up towards the range highs
1H time-frame outlook:
We can see price trading under the $42,000 level and we have now set a lower high. The blue line represents the break of market structure and a close below here and reversal and price could well revisit support at 38898.
The RSI is declining and has room to fall should it look to reach oversold. The stochastic RSI is about to undergo a bearish cross and in the process set a lower high, while I am currently observing bearish divergences on the 1H chart.
Price could deviate below the breakout level and and reverse so I wouldn’t be too quick to jump into shorts. Caution is always advisable when counter-trading the HTF trend or any trend. Should the price break below and retest the level, then that would be the more high-probability trade.
Price might just chop around here for a short time while the oscillators cool off, allowing the bulls to regroup and make another attempt on the 41950 resistance level. A close above this level has me bullish and a close and hold below the breakdown level at 40500 has me bearish.
I will also be keeping an eye on the dollar (DXY) which is an excellent negatively-correlated asset as well as traditional markets like the S&P500 to gauge the markets sentiment towards risk. An appetite for risk is good for BTC and crypto and a risk-off appetite is bad.
With that in mind the bulls want to see a drop in the dollar and a pump in equity markets.
Conclusion
Price action is Bullish on the 1D chart, choppy in the 4H and Bearish on the 1H chart. This price action is all the more confusing because of the low volume on the weekends. We should absolutely have a clearer picture on Monday when traditional stock markets open across the globe. Until then you can refer the charting above and the levels marked to plan out your risk management.
This is completely educational material in nature and should not be taken as financial advice!
A huge thank you to CoinDCX for giving me this opportunity to write such a detailed report and be a part of the #CoinDCXpathbreaker program, enabling me to share such knowledge with everyone in the crypto space.
